Peru: 1965 gold 50 Soles de Oro

[lordmarcovan]

A recent pickup. I bought it mostly to just add to my bullion pile (though I did pay more than spot). But I also like the design, and it’s from my birthyear.

Peru: 1965 gold 50 Soles de Oro

Numista-46427.  KM-230.

NGC MS66, cert. #8207580-012.

.900 fine gold, .6773 oz.

Ex-Heritage Auction #61374, Lot #22307, 12 May 2024.

[robinjojo]

Lovely coin! 

Years ago I collected Latin American republic coins, mostly 8 reales of Mexico, but also Bolivia, Peru, Chile, Colombia, Argentina and Brazil.  Over the subsequent years many have been sold, but I still retain some favorites, including a couple of Bolivian 8 escudos, which I need to photograph, and this Mexican 20 pesos.

Mexico, 20 pesos, Guanajuato, 1872 S.  0.8750 fine

KM 414.4 

[Hrefn]

Having a “bullion pile” of varied types of foreign coinage has one disadvantage.  Odd assorted foreign coins with nonstandard weights and finesses are less liquid than Canadian Gold Maple Leafs (leaves?  Doesn’t seem appropriate for the plural designating the gold coins.) or American Gold Eagles.  However, the @lordmarcovan strategy has advantages as well.

First, exactly because they are less liquid, nonstandard gold is less desirable to some potential buyers.  This means the person willing to acquire it can sometimes get the coin at spot, or close to it.  Even modern gold coins with relatively tiny mintages can fall into this category, selling for spot, or for no more of a premium over spot, than one would pay for a standard bullion coin struck in the millions.  

Second, the variety of types available is enormous.  The resulting bullion pile is more of an accumulation than a curated collection, but that is okay because the primary purpose of the bullion pile is to accumulate bullion.  

Third, over time a coin purchased as bullion has the potential to become a collectible coin.  The run of the mill common bullion coin will probably never appreciate any faster than the gold which comprises it.  But the nonstandard oddball coin may eventually command a price much higher than its scrap value, especially if unusually beautiful, historic, or rare.  The coins below were all purchased years ago at close to their bullion value.  The Russian coins, at least, have appreciated more than equivalent common bullion.  

In short, I think selective purchase of unusual gold coins, if done at a price close to spot price, is a reasonable strategy.  You sacrifice a bit of liquidity, but gain the possibility of significant price appreciation.  Buying beautiful coins with low mintages at close to spot probably maximizes this chance.  

Plus, it’s more fun.  

 

[lordmarcovan]

10 hours ago, Hrefn said:

Having a “bullion pile” of varied types of foreign coinage has one disadvantage.  Odd assorted foreign coins with nonstandard weights and finesses are less liquid than Canadian Gold Maple Leafs (leaves?  Doesn’t seem appropriate for the plural designating the gold coins.) or American Gold Eagles.  However, the @lordmarcovan strategy has advantages as well.

First, exactly because they are less liquid, nonstandard gold is less desirable to some potential buyers.  This means the person willing to acquire it can sometimes get the coin at spot, or close to it.  Even modern gold coins with relatively tiny mintages can fall into this category, selling for spot, or for no more of a premium over spot, than one would pay for a standard bullion coin struck in the millions.  

Second, the variety of types available is enormous.  The resulting bullion pile is more of an accumulation than a curated collection, but that is okay because the primary purpose of the bullion pile is to accumulate bullion.  

Third, over time a coin purchased as bullion has the potential to become a collectible coin.  The run of the mill common bullion coin will probably never appreciate any faster than the gold which comprises it.  But the nonstandard oddball coin may eventually command a price much higher than its scrap value, especially if unusually beautiful, historic, or rare.  The coins below were all purchased years ago at close to their bullion value.  The Russian coins, at least, have appreciated more than equivalent common bullion.  

In short, I think selective purchase of unusual gold coins, if done at a price close to spot price, is a reasonable strategy.  You sacrifice a bit of liquidity, but gain the possibility of significant price appreciation.  Buying beautiful coins with low mintages at close to spot probably maximizes this chance.  

Plus, it’s more fun.  

 

I agree- it’s more fun to add nonstandard coins that weren’t originally minted as bullion issues- though admittedly I’d have been better off on this one if I’d bought it closer to spot.

I’m into this one for $1,705.72 after fees.  And spot is only $1,620.19 as of this post.  Meaning I paid a premium of $85.53 over spot.  But I got a coin already NGC certified, with a mintage of only 23,000 pieces.  It’s the most common date for the type, but still a pretty small mintage compared to many modern bullion coins.

And I note that the NGC (Krause) priceguide lists this coin for $2,050 in MS65… and mine is an MS66- with only 8 pieces graded higher.  

(Not to mention it also has the sentimental value of being from my birthyear.)

So for me at least, it made a little more sense than some other random piece of bullion.  Though it likely doesn’t have huge potential for an increase in numismatic value beyond its bullion content, I do think it’s got a little more potential there (again) than a basic bullion coin would.  

I don’t mind that it’s slightly less liquid due to the nonstandard weight.

Edited May 16 by lordmarcovan

[lordmarcovan]

(Edit- Oops- this reply was intended for another thread.)

Edited May 16 by lordmarcovan
Posted in wrong thread

[Hrefn]

@lordmarcovan, It is a beautiful coin in its own right, and in my opinion well worth collecting.  The premium you paid is only about 5% over spot, which is actually surprisingly low.   If you were to buy a single ordinary American Eagle one ounce coin from a typical online dealer, not certified, and paid cash, the premium is (quick calculation) 3.9%.  Plus postage costs, unless you traveled to a dealer and purchased in person.  If you purchase by mail, depending on your state and the location of the seller, you may find yourself also paying your state sales tax.  If I were to buy a similar coin off eBay, my state would tax me an additional $102.  

So you did very well indeed.  

Even if you believe the premium you pay for a gold coin is few percent higher than the best gold bargain on the market right now, in a few years the difference may prove negligible.  Five years ago, the gold price was $1200/troy oz.   ANY gold coin purchased then at a modest premium was a good buy, whether the premium was 5% or 25%.  If you bought any gold 25 years ago, the price is up sixfold.  

All of this supposed profit is just currency debasement, of course.  If you own an ounce of gold, your wealth is the same regardless of the dollar value of your bullion.  But it is a very reasonable form of savings which retains its purchasing power, and is arguably better than putting your money in a bank.  

The other reason gold coins are a good vehicle for savings is psychological.   It is far too easy to transfer $2000 from your savings to your checking account with the click of a mouse.  It is a bit harder to dip into the bullion pile and select $2000 worth of gold coins to sell.   It makes the act of spending your savings very tangible.